NYRA to Study Belmont, Aqueduct Development

The head of the New York Racing Association, which is operating under a state government reorganization program, is suggesting the racing giant might not be able keep open both its downstate Thoroughbred tracks when it morphs back into some form of private control in the fall of 2015.

In advance of an Aug. 6 board of trustees meeting, Christopher Kay, the NYRA president, wrote to his board members that operating declines in attendance at both Aqueduct Racetrack and Belmont Park "may not be a successful strategy for growth for the next several decades, particularly when all major sports teams in the NYC area have built new stadiums or enhanced their existing facilities with new amenities in the last decade.''

Kay, in a letter to the board made public on the NYRA website the evening of Aug. 5, did not specifically propose selling either of the tracks nor did he lay out any detailed plan of possible alternative ideas for the tracks.

But Kay said NYRA's management, under its current state oversight program, will "analyze plans for the development of either Belmont or Aqueduct properties.'' He did not elaborate, but it is expected he will be grilled by NYRA board members about his possible ideas.

"We will look at the projected risks and benefits of maintaining the status quo,'' he wrote of the two-track model in the metropolitan New York area.

Aqueduct, which opened in 1955, has been most talked about as a possible real estate asset NYRA might seek to unload. Belmont first opened in 1905, but the facility as it stands today was opened in 1968 when the current grandstand was built.

The NYRA president also said the issue of NYRA's future governance model is far from settled. NYRA is in year two of a three-year state oversight period, in which 12 of the 17 board members are appointed by state officials; eight of them are appointees of Gov. Andrew Cuomo.

Kay, in his written report being presented to the board Aug. 6, notes that the three "major players'' in racing are NYRA, a not-for-profit; The Stronach Group, a for-profit venture; and Churchill Downs Inc., a publicly traded company.

"We will evaluate the benefits and detriments of (1) the existing not-for-profit approach, (2) a not-for-profit with a for-profit subsidiary and (3) a for-profit entity like that of NYRA's largest competitors,'' Kay wrote.

Kay said the issue of NYRA's governance, facilities and finances are among the issues NYRA management is working to address in a package of recommendations by next April. A considerable part of the plan will need to be approved by Cuomo and legislators before the 2015 session ends, as expected, next June.

The NYRA president also, on paper at least initially, defends the racing group's handling of Belmont Stakes (gr. I) day, which a state-appointed racing fan advisory group said was riddled with a host of problems that affected both current and possibly future racing patrons.

Kay noted the overall Belmont all-source handle exceeded $150 million, more than $50 million above the 2008 Belmont Stakes record. Kay said some fans contacted him personally to say the day was a success, but that "some of our guests,'' on the track's third largest attendance day ever, "experienced some disappointing moments."

He said NYRA apologized to those fans and offered them free tickets to events at Belmont and Saratoga.

"We are already planning for an improved 2015 Belmont Stakes day,'' Kay wrote to the board.

Kay also noted that NYRA at its current Saratoga meet is running up to three fewer races per week, which he blamed in part on a decrease in national foal count. He said the situation, also due in part to NYRA's decision to "fortify the quality of the Saratoga meet," will likely end up affecting overall handle of the summertime racing session.

The NYRA board is set to hear a detailed accounting of the group's finances, which saw net revenue from racing operations for the quarter ending June 30 at $43.8 million, up from $38.5 million during the same period in 2013.